A Revolution in Agriculture – Part II

Today we’re back with Nate Storey, PhD. Nate’s company Bright Agrotech is revolutionizing food production by creating innovative new ways to grow food “vertically”.

Nate and his team are the real deal, so read on and learn a bit more about how you can add a bit of food security and resiliency right in your own backyard or spare room!

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Scott: Nate, when growing vertically, light extinction is always a challenge as plants at the top of the towers receive more sunlight than those at the bottom. How does your system combat this problem?

Nate: Light extinction was a major consideration from the start. Most vertical production methods grow on four sides, which mean that there will always be one side with direct light, two sides with mediocre light, and one side shaded. Either growers are forced to rotate the column to provide even light, or they end up with good production on one side, mediocre production on two, and poor production on the back.

This is terrible resource use! Not only are you producing substandard products on three sides, but you’re losing a lot of money in the process. Producers are spending money on space, electricity, water, heat, light, etcetera on these plants, but often they aren’t even saleable.

So, to fix this I decided to grow on only one side. The other three sides of the tower reflect light to ensure that all of my available light is concentrated only in salable product. It’s essentially a conservation approach to vertical production. When I looked at light extinction rates compared to traditional tower systems, I was growing more produce in less space and experiencing light extinction rates around 32% on average for the entire tower mass. At less dense spacing with less overall production per square foot, traditional extinction rates are between 85% and 90%. So, in that regard, my design hypothesis proved out and we’re getting much better production as a result.

One additional point on single side growing is the ancillary benefits. This includes making it easier to handle, ship and install the towers.

Scott: I get a lot of people who tell me that food prices are in “bubble territory” and poised to collapse any day now. However, as global food prices continue to rise, something I attribute to growing middle classes in Latin America and Asia, what are your thoughts on this topic of debate? Do you believe in the secular growth story in agriculture?

Nate: I’ll preface this by saying, this really isn’t my area of expertise, but I certainly have an opinion. I think the “bubble territory” claims that are being slung around are nonsense.

Agricultural goods are going to increase in value across the board, mostly because demand for high-value agricultural products is increasing. This is primarily the result of growing Asian markets and because the primary costs in agriculture, land and energy, are only going to increase over the coming years. Is there potential for speculation to get out of control in certain areas? Sure, but is it widespread enough to really impact global food prices? Not right now.

I am slightly concerned with land speculation that is pricing agricultural land way above its potential productive value, but I don’t think this is widespread enough to cause serious concern, at least yet.

People will always need food, but as the global population grows they’ll also need medicine, manufactured goods, energy, chemicals, etcetera, and traditionally food-focused fields of agriculture will increasingly be the most cost effective place to produce these things. All of these things will be competing for more limited and expensive resources, so do I see the price of food dropping dramatically in the long term? The answer to that is no.

Now, I don’t believe in some Malthusian future where the world is starving and agriculture hasn’t kept up, but I also don’t believe that our improvements in yield and production can increase at a rate that will bring the costs of agricultural products down significantly, especially with other industries competing for land and resources. I will agree that the prices of many crops like corn are artificially inflated, but I’m not convinced they are in “bubble territory.”

Now if the breadbaskets of Africa or Central Asia really come online and someone figures out how to run a tractor on an inexpensive fusion reactor, then watch out. Until then, I’ll bet on food prices increasing, especially those related to protein consumption.

Scott: When one looks at developing countries there are some bright spots for innovate guys like yourself to come in and set up an operation. For example, food prices in Mongolia, Angola, Fiji and Timor Leste, to name a few, are higher than the average local can afford (for example 1 kilo of strawberries in Mongolia sells for about US $22.00). Looking at these opportunities, is there a future for hydroponics in commercial agriculture? More importantly, is it economical?

Nate: Well, the last several decades have demonstrated that hydroponic production can be economical, but like all enterprise, it depends closely on market variables. Labor is a major cost in greenhouse production and greenhouses require fairly strong infrastructure to support them. If this infrastructure exists, developing countries where there is very little if any domestic agriculture, food transportation costs are high, and there is market demand, offer excellent opportunities, especially in the realm of high water-content crops like fruits and vegetables. Often these countries have very low labor costs as well, so this offers some cost reductions for growers.

In the developed world, greenhouse produce has become a major part of our diets, and I think the same will be true elsewhere, especially in countries where pollution and environmental degradation has seriously impacted agricultural production and food safety. If my cost structure stayed the same, I had reliable energy sources, and the market could absorb my production, I could make quite a bit of money at $22.00/kilo on strawberries. That’s a beautiful price almost anywhere in the world (laughs).

Scott: As I ask this question I am experiencing a wave of mini power outages, ones just large enough to kick me off the Internet and cause Pandora to freeze up; first world problems (laughs). This leads me to ask how you manage your electricity costs. Amateurs and “visionaries” alike pound the table on grow lights and energy intensive systems. What are your thoughts on the subject?

Nate: I fear that the industry focus on grow lights is horribly misguided. That’s not to say that supplementary lighting isn’t useful or necessary. However, there are huge differences between traditional light supplementation for daylight extension, and reliance on growlights for production.

Right now what I see is many young entrepreneurs throwing away light, the one inexpensive resource they have in production, and exchanging it for increased fixed costs on the front end and the ongoing variable costs of electricity. It’s nonsensical to me. It would make sense if energy were cheap or free, or the crop being produced was of such high value that electricity costs were incidental; however, most of the crops being produced have relatively low value. In my opinion, grow lights make sense in Alaska, and when used for daylight extension in other temperate regions during the winter months.

There are a few other applications where they make sense, but few of them would be food-production applications. Perhaps someone out there has figured out a way to make the use of grow lights economical, but I sure haven’t.

Scott: During our first conversation we spoke intensively on initial capital expenditure and how too many growers will invest much more than necessary to become operational. How can people go about avoiding mistakes like this?

Nate: Well, it starts with having some experience in the industry. It’s important to know what you can cut corners on and what you should spend money on. The greenhouse and small farm industry have seen a massive surge in entrants in recent years, which is great. However many of these folks don’t know the first thing about the industry they’re entering, so, they end up either investing too much in the wrong thing, or not investing enough.

Many folks don’t understand the market that they’re serving, so instead of starting with lower costs and trying to grow into their markets organically, feeling out what products and services are needed, they invest too much, grow too quickly, and quickly fail.

One piece of advice I give most of the folks I talk to is to spend twice as much time on market analysis as you do on planning the production operation. Likewise, once you’re in operation, plan on spending twice as much time marketing your products as you do in the greenhouse or in the field!

Starting with an experienced partner is also important and a lot of mistakes can be avoided. I’m constantly amazed though, at the number of people who have an idyllic vision of farming in their minds, who don’t want to be bothered with the realities of business and markets.

Scott: My partners Chris and Mark were just in Fiji setting the groundwork for a sustainable, resilient property acquisition. This puts thoughts of lounging on the beach and drinking from coconuts in my head, something I think we would both be jealous of (laughs).

What trends do you see in the space of sustainable and “backyard agriculture? Is this a market you are keen to service?

Nate: I strongly feel that certain segments of agriculture are ripe for decentralizing technology and processes, especially ones that undermine the current and increasingly questionable cost structure of fruit and vegetable production and distribution. I think that popular culture is primed for this kind of structural change as well. Look at the support that the Organic Food movement received, and the support the Local Food movement is gaining.

Basically, so many market variables are aligning that will really enable folks to play a more active role in how some of their food is grown.

Bright Agrotech is preparing for this both through our equipment development and business model development. Ideally, I would be free to design equipment to supply this emerging market and consult, allowing local people to serve their local economies. However, if the adoption rate is slow, then my business may be forced to play a more active role at injecting our equipment and business models into this space. I think it’s going to be a huge market within the next few years, with massive potential in the long term.

Scott: Bright Agrotech is a young business, growing rapidly and solidifying a plan for the future. You’re in the middle of a Kickstarter campaign (Note: Nate’s Kickstarter campaign can be accessed here: Grow Up! Vertical Farming for Everyone)

Nate, what do you intend on putting the funds raised via Kickstarter towards?

Nate: Well, we’re using this campaign both as a fundraising and preorder process to build the molds and do the first run of a reservoir we’ve developed. We’ll be selling it as a component in a kit initially, but it has been designed to function as a sort of “dock” to receive towers from greenhouse producers as well.

We’ll use it to enable our local live sales models that we’ve been experimenting with. We’ll also use it for a live CSA model that I think has a lot of promise. If we can raise the funding for our initial mold costs as well as our first run, I’ll be pretty happy with the campaign.

Scott: That’s a no brainer in my opinion, as people want ever-fresher food, so why not let them grow it themselves..? What will the kit consist of?

Nate: The kit will consist of a tower, the reservoir, a pump and some irrigation tubing. I think it will be a really easy, functional way for folks to play with vertical gardening. It will also open the door to their participation in live tower CSAs down the road.

We are essentially managing our preorder process through our Kickstarter campaign. It’s new territory for us, so I’m excited to see how folks respond to both our kit design as well as the bigger picture.

Scott: Nate, thanks for your time and I look forward to speaking again soon.

Nate: Likewise.

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I wasn’t joking when I said I think I found one of the “wise men” and a truly innovative company on the front line of modern agriculture.

Bright Agrotech is an example of the many companies we are keen to keep on our radar, for they have the potential to tip the scale in their favour and encourage a revolution. This not only means the potential for big gains, but the opportunity to better people’s lives as well; two things which should always go hand-in-hand.

We will be staying current with Nate’s developments, so stay tuned for future updates! And for anyone who is interested in resiliency and decreasing your dependence on a broken system, Nate’s Kickstarter project is something we’d take a serious look at.

- Scott

“Consciousness is only possible through change; change is only possible through movement.” – Aldous Huxley

Interesting.
Food wastage? A significant percentage of output is wasted (est 30-40% in US, UK). There is growing awareness and actions taken to reduce this. Few years ago the EU changed their law to allow 17 (I think) irregular shaped fruits and veges to be sold. Less wastage will reduce pressure on production (in theory at least).
Re price pressure, there’s subsidies (reducing/elimination of existing subsidies as well as new subsidies)